In the previous four articles in this series, we have outlined the issues driving the need for change, and explored the strategies, technology and processes that could drive these changes. You may have now even developed your roadmap to reduce risk, save money and retain talent by refocusing on business process excellence and optimizing your modeling and people resources.
But perhaps the greater challenge still remains: how to actually get there with current projects filling diaries for unending periods and limited budget for the extra headcount needed to reinforce often overstretched teams.
In this article, the last in the series, we’ll outline the steps you can take to realize change, driving on from roadmap to reality.
Building a compelling business case for investment
In a world of scarce resources and scare budgets, there are fundamentally two approaches to driving change. The first is to identify a “save more than you spend” project. These are few and far between, but opportunities do exist such as cloud migrations. Here the aim is to create a virtuous circle where the cost saving funds future projects. The second is to invest in re-platforming or implementing new tooling for automation. For this, you need the sponsorship of senior leadership, and a compelling business case for a project that has a strong, short-term return on investment. There are four key steps to success with this approach.
Next steps: Making positive change happen
To make the changes you need to improve the efficiency and effectiveness of your life pricing and modeling team, there are a range of options. The right one – or ones — for you will depend on the makeup of your team, the demands of your reporting cycle and the size of the insurance business you work for:
- With a large development team, introducing collaborative development will help to improve the auditability of your model build, and at the same time improve the team’s skills and opportunities. See article 4 in the series for more information.
- With a compute-heavy reporting cycle, particularly with stochastic models, moving to the cloud to get elastic computing will help you to deliver faster and save money. See article 4 in the series for more information.
- With a complex set of reporting, automation can improve governance and auditability, as well as significantly reduce business risks. It can also improve the time-consuming work of validating data and preparing reports. See article 3 in the series for more information.
- Smaller insurers should consider automating data collection and report generation. Relative to large insurers, this is probably the largest part of your work and thus offers you the biggest potential payback.
Over the course of this article series, we’ve discussed how positive change is necessary for many life modeling and reporting teams, though it is far from inevitable. So, we have also carefully laid out the considerations, decisions you’ll need to take, and the tools and tactics you have at your disposal to deliver the finance transformation you need.
There’s no one solution for all and indeed no one right solution for any individual company. But there are solutions that will deliver the changes you need, with the resources you have available, and that will maximize the return on the investment in finance transformation you make in people, processes and technology.
Further information on driving life financial transformation
To find out how we can support your actuarial team drive financial transformation, including modeling, automation and process improvements, please contact your WTW consultant, email us or visit RiskAgility Financial Modeler (FM).
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